The injection of dollars into circulation by the Central Bank of Nigeria as well as those released into the market by operators of bureau de change, who hitherto had been hoarding them, may have been responsible for the sudden appreciation of the naira against the dollar in the last few days, bureau de change operators said in Lagos yesterday.

The wide gap between official and parallel markets narrowed as naira which traded at around N190 only few days ago, has appreciated to around N160. Ditto for the official market where it exchanged for N146 to a dollar.

In its efforts at solving the exchange rate challenge, the CBN Monday said it would inject $100 million into the Bureau de Change segment of the foreign exchange market this week. It said the injection would be done through the commercial banks.

"We'll supply whatever is necessary to get the economy on an even keel," Soludo said.

"If the market is going to absorb between $100 million and $200 million between now and next week, we'll supply," Soludo said last week.

Soludo had said that the CBN would only sell the dollars to class'A' Bureau De Change and the bank Bureau De Change in order to make the new policy effective.

Speaking to Daily Trust separately, Mr. Shittu Olajide, the Public Relation Officer of Association of Bureau De Change Operators of Nigeria (ABCON) and Mr. Adewale Aleshinloye of B.A.T Bureau De Change, said the flooding of dollar in the market might have contributed to the appreciation of naira in the last few days.

Mr. Olajide said though this may not be the permanent solution to the problem as the naira may still fall, flooding the market with dollar has for now provided temporary solution to naira fall.

The ABCON PRO said rumours last Friday that the apex bank was going to flood the market with dollar made the BDCs who were hoarding the Dollars to release them into the market, thereby causing Dollar to fall. Because of this, he said, many operators lost millions of naira.

"The appreciation of Naira may be due to the too much of Dollars in circulation. You know the CBN flooded the market with Dollars and this even forced some of members who are hoarding theirs to released them. But I can tell you this may not be the permanent solution as we may still revert to old way; the naira may still fall.

"Some of our members have lost millions of Dollars because of what is happening in the market now", said the ABCON spokesman.

On his part, Mr. Aleshinloye said if what is happening is sustained by the CBN, the Naira may appreciate further.

Last month, the CBN raised the minimum capital requirement for bureaux to access foreign exchange auctions to N500 million, up from N10 million, in a bid to stop funds flowing to the black market.

Other measures put in place by the CBN are: Special foreign exchange interventions in which cash will be sold to the registered Bureau De Change (BDC) of the deposit money banks and only banks with large branch network shall be engaged for this purpose at the initial stage.

Foreign exchange in cash to be made available at all CBN branches for ease of accessibility by the authorised dealer banks.

The banks will purchase forex cash by submitting bids. The banks' BDCs will sell at no more than two per cent above the CBN rate.

Each bank BDC will be entitled to purchase a maximum of $5 million per week and funds from the CBN will not be re-sold except to end users subject to the guidelines below.

Eligible transactions, documentations requirement and limits are: one, BTA subject to letter of request from the corporate body, international passport, air ticket, endorsement of passport by BDC stating the amount sold, and a limit of $5,000 per quarter; two, PTA maximum limit of $4,000 per quarter; three, school fees abroad for university and high schools subject to school bill, admission letter and a maximum of $10,000; four, medical bill abroad subject to a referral letter from a specialist hospital and a maximum of $10,000 per case; and five, credit card payment subject to a limit of $5,000 per quarter.

Others are mortgage monthly payment abroad, subject to duly executed assignment, demand note/invoice and a maximum limit of $5,000 per annum; and utility bills subject to documentary evidence and a maximum of $5,000.